FRT. CHARGED ON BILL AS PER PURCHASE ORDER CONDITION WHO IS LIABLE TO PAY SERVICE TAX

[Asked by Guest]

Dear Sir

We have received one bill of our vendor, & vendor has charged freight on bill as per purchase order condition. so my question is who is liable to pay service charge to govt.

As per LR copy transporter not charged service tax on LR. & Transporter received payment from vendor & same vendor received the freight charges from us.

So please tell who will pay the tax as per RCM.

AI Summary

Reverse charge liability on freight: person liable to pay freight must bear service tax; credit depends on transport documents.
Liability for service tax on freight invoiced by a vendor depends on who is the person liable to pay freight under the reverse charge mechanism. If the buyer is the statutory freight-paying person, the buyer must discharge service tax under reverse charge and may claim input credit supported by goods transport provider documents. If the vendor is the liable person and pays the transporter, the vendor must pay service tax and cannot claim credit for transport services it did not consume, though it may recover the tax element from the buyer by adjustment in invoicing.